Dan Warne07 June 2007, 5:06 AM
Virgin Mobile has canned the 1GB for $10 mobiie deal it launched just weeks ago.
Virgin Mobile has canned the 1GB for $10 mobile deal it launched just weeks ago, Seamus Byrne at Gizmodo Australia has
reported today.
Virgin has dropped it back to a far less impressive 300MB (still an excellent deal; it just sucks in comparison.)
When we originally spotted the plan, it looked too good to be true -- $10 on top of any Virgin Mobile voice plan offered a full gigabyte of usage, albeit with utterly ridiculous overusage rates of $15,000 per gigabyte.
Virgin Mobile is owned by Optus, which made it doubly odd, since the same service (more or less), on the same network, branded by Optus, costs $69.95 for 500MB or $129.95 for 2GB. Put another way, Optus Jr was undercutting Optus Sr in a big way.
At the time, I asked Optus why there was such disparity in the pricing between what is effectively a sub-brand of the main company, and got the standard PR response about being separate companies despite having common ownership, and how Optus provides a richly differentiated tapestry of service providing strategic synergies to users, etc, etc, and that's why they charge a lot more.
Now, Virgin Mobile's PR manager has told the guys at Giz Australia that "we ... are confident that we are offering our customers exactly what they want/need."
Now, that's some impressive PR spin -- Virgin is offering exactly what customers want and need by reducing the value of their offer by two thirds.
As Giz points out, at Virgin Mobile's utterly ludicrous excess data rates, if you wanted to use 1GB under the new plan, you'd be looking at $10,510 -- that's the $10 fee plus $10,500 in excess usage charges.
That's exactly what customers want!
Officially, Virgin Mobile's excuse is that it had picked up the fact that people were planning to hook their 3G phones up to their PC and use it as a home broadband service, foregoing line rental and ADSL fees altogether.
This was perfectly understandable considering the offer was such good value. When the offer was initially launched, Virgin Mobile's PR manager, Amber Morris, said that VM recommended people didn't use it as an internet service for a PC, but at the same time didn't believe in being "unnecessarily restrictive", so wouldn't block people from doing that.
The official line now is "we saw evidence that after two weeks in the market place the 1gig plan for $10 was at risk of being misused as a home broadband replacement - something it was not designed to be used for."
Still, despite the annoying backflip, there's no doubt that Virgin Mobile's deal is still among the best in the market for people who want to receive email, browse the web and do IM chat on their phone handset.
But it's just annoying that telcos chop and change so often, and so frequently launch plans with allowances that they clearly don't actually want people to use.
"Contention" based pricing is a standard part of the telco industry -- plans are priced based on the assumption that most people won't use their monthly allowance and therefore the law of averages allows the service to be delivered at a lower cost to everyone.
But it's completely contrary to consumer law, which dictates that what is advertised must be delivered. I reckon it sucks for a telco to launch a service with hot pricing, only to withdraw it two weeks later because it fears people will actually use the service to its advertised capacity.
What do you think?
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